The Court Retains Jurisdiction To Hear Part 23 Applications In Provisional Assessment Proceedings, But Will Ordinarily Decline To Exercise It

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The County Court at Derby’s decision in Maidens v Building Supplies Distribution Limited [2026] EWCC 25 addresses whether the court should entertain interim applications before provisional assessment is conducted.

Background

The underlying claim in Maidens v Building Supplies Distribution Limited [2026] EWCC 25 was a personal injury matter which settled for £43,000 on a Part 36 basis. Following settlement, the Claimant’s costs lawyers served a bill of costs in the sum of £56,460, together with notice of commencement, on 19 February 2025. The Defendant served Points of Dispute on 5 June 2025, and the Claimant served Replies on 26 July 2025. The matter fell within the provisional assessment regime under CPR Part 47, and was transferred to District Judge Davies sitting as Regional Costs Judge at the County Court at Derby from the County Court at Lincoln.

The Defendant’s Points of Dispute were accompanied by an itemised Excel spreadsheet, appended with the intention of rendering the Points of Dispute compliant with the requirements identified in Ainsworth. The Claimant’s Replies took issue with the use of that spreadsheet, contending that it could not properly be relied upon at provisional assessment. The Replies also raised more routine objections concerning the adequacy of Ainsworth particularisation in relation to specific points, including Points 7, 15 and 20.

The Defendant subsequently brought an interim application under Part 23, seeking a declaration that the Points of Dispute were compliant with CPR PD 47 paragraph 8.2, and also seeking to strike out those parts of the Replies which asserted non-compliance with Ainsworth. That application was adjourned and came before District Judge Davies on 15 April 2026, with Mr A Hood (solicitor) of Carter Burnett appearing for the Claimant and Mr P Hughes (counsel) instructed by Kennedys Law appearing for the Defendant, both attending remotely by Cloud Video Platform.

By the time of the hearing, the factual and procedural landscape had narrowed. The Claimant conceded the admissibility of the Excel spreadsheet for the purposes identified in Ainsworth, with the result that the majority of the Replies on the spreadsheet issue fell away, save for the Replies to Points 7, 15 and 20. The Claimant indicated that Amended Points of Reply would be filed and served to reflect that concession.

Costs Issues Before the Court

The application raised two distinct issues for determination. The first was a jurisdictional question: whether the Court had any power to entertain a Part 23 interim application within the provisional assessment regime at all. The Claimant’s position was that no such jurisdiction existed, relying on PD 47 paragraph 14.2(2), which excludes paragraph 13.7 of PD 47 from the provisional assessment process. Paragraph 13.7 would otherwise permit applications under Part 23 in the context of detailed assessment proceedings. The Claimant argued that, absent an express provision permitting such applications, the provisional assessment regime was a self-contained process which did not accommodate preliminary or interim applications of this kind.

The second issue, which arose only if the Court found that jurisdiction existed, was whether it should exercise its discretion to determine the remaining Ainsworth compliance disputes in relation to Points 7, 15 and 20 in advance of the provisional assessment on the papers. The Defendant invited the Court to resolve those issues there and then. The Claimant resisted that course, arguing that Ainsworth compliance is a qualitative matter for the judge conducting the provisional assessment, and that determining such issues in advance would fetter the discretion of the assessing judge and interfere with the streamlined nature of the regime.

A further, subsidiary point arose as to whether the application, or its continued pursuit following the concession on the Excel spreadsheet, amounted to an abuse of process.

The Parties’ Positions

The Claimant’s position was, in the first instance, that the Court simply had no jurisdiction to hear the application. Reliance was placed on PD 47 paragraph 14.2(2), which disapplies paragraph 13.7 within the provisional assessment regime. It was submitted that this exclusion reflected a deliberate policy choice: the provisional assessment process is streamlined and self-contained, and the mechanism for challenging the outcome is an oral review following assessment on the papers. There is, on this analysis, no room for Part 23 applications within that process save where expressly provided for. If the Defendant wished to litigate preliminary issues of this kind, the appropriate course was to apply to remove the matter from the provisional assessment regime and seek a full detailed assessment under CPR 47.15(6).

On that basis, the Claimant submitted that the application was an abuse of process and should be dismissed on that ground alone. In the alternative, if the Court found that jurisdiction existed, it was submitted that the remaining Ainsworth disputes in relation to Points 7, 15 and 20 were matters of evaluation and degree, properly to be addressed by the judge conducting the provisional assessment when considering the individual entries in the bill. It was further submitted that, in any event, alternative submissions and concessions were already contained within the Replies, such that the provisional assessment could proceed on the papers without any preliminary determination. Mr Hood also submitted that the Defendant was, in substance, seeking to censor the Claimant’s criticisms of the Points of Dispute, and that entertaining the application would set an undesirable precedent by encouraging parties to litigate costs disputes by instalments.

The Defendant’s position was that the Court did have jurisdiction to hear the application, notwithstanding the exclusion of paragraph 13.7. Mr Hughes submitted that the exclusion of that paragraph did not operate as a blanket prohibition on all applications; rather, the Court retained its general case management powers under CPR 3.1(2)(k) and (m), which remained available regardless of the assessment regime in play. The provisional assessment regime governed the method of assessment but did not strip the Court of its inherent case management jurisdiction to deal with discrete procedural issues. On the substantive question, the Defendant sought a declaration of compliance with PD 47 paragraph 8.2 and a strike-out of the non-compliant parts of the Replies. Mr Hughes invited the Court to resolve the remaining Ainsworth issues on the basis that the parties were before the Court.

The Court’s Decision

District Judge Davies accepted the Defendant’s submissions on jurisdiction. The exclusion of PD 47 paragraph 13.7 within the provisional assessment regime did not, in the judge’s view, operate as a prohibition on applications as such. The Court’s general case management powers under CPR 3.1(2)(k) and (m) remained available, and the provisional assessment regime governed the method of assessment rather than removing the Court’s broader procedural jurisdiction.

However, the judge declined to exercise that jurisdiction. The application was dismissed on the basis that it was not appropriate, as a matter of discretion, to determine the remaining issues in advance of the provisional assessment. The judge’s reasoning was rooted in the purpose and design of the provisional assessment regime, which was introduced following the recommendations of Sir Rupert Jackson to provide a proportionate and self-contained mechanism for resolving lower-value costs disputes, and to avoid the proliferation of interim hearings and associated expense that had previously characterised detailed assessment proceedings.

The regime proceeds on the basis that disputes as to quantum, reasonableness and proportionality are to be addressed through Points of Dispute and Replies, with the assessing judge well placed to deal with issues concerning the presentation and substance of those documents. The judge held that the Court should approach applications to intervene prior to formal provisional assessment with caution, since permitting such applications risks undermining the very purpose of the regime. The existence of jurisdiction did not mean that it should be exercised.

The Claimant’s concession on the admissibility of the Excel spreadsheet was significant. What remained were specific Ainsworth disputes in relation to Points 7, 15 and 20. Those issues, insofar as they concerned the level of detail or the merits of individual items, were matters for the judge conducting the provisional assessment. The Defendant sought, in substance, to pre-empt that evaluative exercise, which was precisely what the provisional assessment regime was designed to avoid. In light of the spreadsheet concession, there was a structured mechanism available (namely, the provisional assessment process itself) to resolve the remaining issues, and there was no demonstrated necessity for the Court to intervene at that stage.

The judge declined Mr Hughes’s invitation to determine the remaining Ainsworth issues, stating that he declined to do so as a matter of principle. Costs had already been incurred on the application, and they were not insignificant. It was not inevitable that there would be an oral review. The Court was required to have regard to the need to deal with cases at proportionate cost, which applied with particular force in costs litigation.

To entertain the application in circumstances where the dispute was suitable for provisional assessment, particularly in light of the concession made, would set an unwelcome precedent. It would encourage parties to bring interim challenges routinely, seeking to litigate issues by instalments which the rules intend to be resolved in a single, streamlined process. That would undermine the provisional assessment regime, increase costs disproportionately, and place additional burdens on court resources. That would not be consistent with the overriding objective.

The judge added for completeness that he was not persuaded that the application when mooted crossed the line into an abuse of process in the strict sense, given that he had accepted Mr Hughes’s submissions on jurisdiction. The issue over admissibility of the Excel spreadsheet schedule was not plainly unarguable when foreshadowed in correspondence, but its continued pursuit following the concession (before the application was issued, as Mr Hood pointed out) as to admissibility of the Excel spreadsheet schedule rendered it disproportionate.

The Claimant’s costs lawyers were directed to file Amended Points of Reply to reflect the Excel spreadsheet concession by 4.00 p.m. on 6 May 2026, and to re-file the N258 in the County Court at Derby by 4.00 p.m. on 27 May 2026. The Defendant’s application was dismissed. The Defendant was ordered to pay the Claimant’s costs of the application, summarily assessed at £11,220.00, to be paid by 4.00 p.m. on 6 May 2026.

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High Court Strikes Out Non-Compliant Points Of Dispute Despite Late Annotated Schedule

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The King’s Bench Division’s decision in Ward v Rai [2025] EWHC 1681 (KB) addresses the consequences of serving non-compliant Points of Dispute in detailed assessment proceedings and the limits of a costs judge’s discretion to permit late variations under PD 47, paragraph 13.10.

Background

The underlying claim arose from a road traffic accident on 18 September 2019 involving Paul Ward (the Appellant/Claimant) and Gagandeep Rai (the Respondent/Defendant). Liability was admitted by the Respondent, with causation and quantum remaining in dispute. The claim was settled on 11 January 2023 by way of a Part 36 offer in the sum of £546,984.

Detailed assessment proceedings were commenced by the Appellant on 3 August 2023. The Appellant’s Bill of Costs included Item 39, which claimed 134.1 hours for work done on documents. That work was itemised in Schedule 2 to the Bill, which ran to 24 pages and comprised 418 individual entries describing the date of the work, the nature of the work, the fee earner involved, and the time spent.

On 30 August 2023, the Respondent served Points of Dispute comprising 25 points. Point 23 addressed Item 39 and made a series of general criticisms of the document time claimed—including that extensive and unnecessary time had been claimed by a Grade A fee earner reviewing medical records before expert evidence had been obtained, that time had been claimed for noting receipt of documents, that multiple administrative entries had been included, and that various entries were duplicated. Point 23 stated that the Respondent would “rely on an annotated documents schedule of objections in support” and proposed that document preparation time be limited to 68 hours 12 minutes. Crucially, no specific items from the 418-entry schedule were identified.

On 4 January 2024, the Appellant served Replies to the Points of Dispute. In those Replies, the Appellant challenged Point 23 on the basis that no specific bill entries had been identified and that neither the nature nor the grounds of the dispute were adequately stated. The Appellant cited Ainsworth v Stewarts Law LLP [2020] EWCA Civ 178 and indicated that, in the absence of specific areas of reduction being identified, a meaningful response could not be provided. The Appellant nonetheless offered 130 hours for Item 39 in response to the general points raised.

On 26 March 2024, the Appellant filed a request for a two-day detailed assessment hearing. A notice of hearing was issued on 28 May 2024, listing the matter for 5–6 August 2024.

At around 4.15 pm on Wednesday 31 July 2024—technically on the morning of Thursday 1 August 2024—the Respondent filed and served the annotated document schedule that had been referenced in Point 23. This was the first occasion on which specific individual items within Item 39 were identified as being in dispute. The schedule categorised the Respondent’s objections to individual entries under eight headings: duplication; supervision; non-progressive; excessive time claimed; non-contemporaneous file notes; case management discussion; incoming correspondence and routine response out; and lower grade offered, not Grade A work. The schedule advanced a primary case of 58.5 hours and an alternative case of 58.8 hours—figures materially different from the 68 hours 12 minutes proposed in the original Point 23.

The detailed assessment hearing took place over 5–6 August 2024 before Deputy Costs Judge Friston. During the hearing, the Judge determined preliminary points and general points from the Points of Dispute. The contentious issue of Point 23 and the annotated schedule was addressed in the latter part of 6 August 2024. The Judge declined to strike out Point 23 and permitted the Respondent to rely on the annotated schedule, adjourning the assessment to a third day. He indicated that costs consequences would follow and would be addressed at the conclusion of the assessment.

The adjourned hearing took place on 8 November 2024. The Judge conducted a line-by-line assessment of approximately 10% of the constituent parts of Item 39. The remaining 90% was assessed using a broad-brush “coffee break option” suggested by the Judge, whereby the parties took a break and the Judge gave them a provisional view on which they made submissions, with the option of detailed item-by-item assessment still available if they wished. The Bill was assessed in a total sum of £89,032.62 with £8,234.91 in interest.

The Deputy Costs Judge’s Decision on Point 23 and the Schedule (6 August 2024)

Deputy Costs Judge Friston gave two reasons for declining to strike out Point 23. First, he considered that the original Points of Dispute would have allowed there to have been a fairly broad-brush assessment in any event and would have allowed the Appellant to have known the case being made against him and to have responded to it. Second, and “perhaps more importantly,” he found that both parties knew that there should have been a further document and that both parties were significantly at fault for having failed to comply with the overriding objective by not ensuring the schedule was available earlier.

The Judge acknowledged that the schedule was served “unacceptably late, almost to the point that one could say, in other circumstances, that it was an ambush.” However, he concluded that it was not an ambush on the facts because it had been mentioned in Point 23 from the beginning and both parties were significantly at fault for not having ensured it was available when preparing for the assessment.

The Judge considered that PD 47, paragraph 13.10 gave him “very wide powers” to either allow or disallow an amendment and to impose conditions, including conditions as to payment of costs. He concluded that there would inevitably have to be an adjournment because it would be unfair to require the Appellant’s counsel to proceed on the basis that he had to respond to the schedule, but equally unfair to require him to deal with the categories in Point 23 “almost in a vacuum” without the benefit of the schedule. He therefore permitted the Respondent to rely on the schedule but indicated that there would be cost sanctions to be imposed at the end of the assessment.

The Judge noted an issue with the Appellant’s bundles: Bundle 1 contained all the documentary items, while Bundle 2 grouped together attendance notes relevant to the general points of principle. However, the Appellant’s counsel had not been informed until very recently that Bundle 1 contained the entirety of the documents. The Judge stated that his criticism of the Appellant’s solicitor in this regard “paled into insignificance” compared to his frustration at the parties’ lack of communication about the schedule.

The Costs Judgment (8 November 2024)

The Judge then addressed the costs of the detailed assessment. The Respondent had made a Part 36 offer which the Appellant had not beaten. The parties agreed that the Respondent would pay the Appellant’s costs up to the date on which the offer expired (3 July 2024) and that the Appellant would pay the Respondent’s costs thereafter, subject to argument about whether the Respondent should bear the Appellant’s costs of the adjourned hearing in any event.

The Appellant argued that the Respondent’s conduct in serving the annotated schedule so late had led to the need for an adjournment, such that the Respondent should be ordered to pay the Appellant’s costs of the adjourned detailed assessment. The Appellant cited Barton v Wright Hassall LLP [2018] UKSC 12 and Woodward v Phoenix Healthcare Distribution Ltd [2019] EWCA Civ 985 in support of the proposition that while the Appellant was under a duty to assist the court for the purposes of the overriding objective, the Appellant was under no duty to remind the Respondent that they had failed to file the schedule.

The Judge found that while the Respondent was significantly at fault for having served the schedule very late, the Appellant was also at fault. He referred to two matters: first, that the Appellant had not chased the Respondent for the annotated schedule; and second, that it had become apparent during the course of the 6 August hearing that the Appellant’s counsel was unaware that documents he needed were contained in the bundles. The Judge stated—contrary to his earlier finding that the bundle issue “paled into insignificance”—that the bundle issue was “more important” and that had counsel been so informed and had the court dismissed the Ainsworth point (as it did), there would have been no need for an adjournment as the court would have been able to deal with the first items in the documentary schedule.

The Judge therefore declined to award the Appellant his costs of the adjourned hearing and ordered that the Appellant pay the Respondent’s costs from 3 July 2024, subject to a small reduction to reflect the time spent on 6 August 2024 dealing with the annotated schedule.

The Appeal

The Appellant appealed against the Judge’s orders of 6 August 2024, advancing five grounds of appeal. Permission to appeal was granted by Sir Stephen Stewart on 11 March 2025. The appeal was heard by Mrs Justice Hill DBE on 18 June 2025, sitting with Costs Judge Leonard as assessor, and judgment was handed down on 3 July 2025.

The Legal Framework

PD 47, paragraph 8.2 requires that Points of Dispute must be short and to the point, must follow Precedent G, and must identify any general points or matters of principle requiring decision before individual items are addressed. Critically, paragraph 8.2(b) requires Points of Dispute to “identify specific points, stating concisely the nature and grounds of dispute.”

In Ainsworth v Stewarts Law LLP [2020] EWCA Civ 178, Asplin LJ held that paragraph 8.2 makes clear that Points of Dispute should be “short and to the point and, therefore, focussed” and that specific points should be made “stating concisely the nature and grounds of dispute.” Common sense dictates that Points of Dispute must be drafted in a way which enables the parties and the court to determine precisely what is in dispute and why. That is necessary to enable the receiving party to reply to the complaints and to enable the court to deal with the issues raised in a manner which is fair, just and proportionate. Asplin LJ identified CPR 3.4(2)(b) and (c) as the applicable powers enabling a Costs Judge to strike out non-compliant Points of Dispute.

Although Ainsworth concerned solicitor-client assessment proceedings, recent decisions including Wazen v Khan [2024] EWHC 1083 (SCCO) and St Francis Group 1 Ltd v Kelly [2025] EWHC 125 (SCCO) have confirmed that the principles apply equally to detailed assessment proceedings between parties under CPR Part 47.

PD 47, paragraph 13.10 addresses variations to Points of Dispute. While permission is not required to vary Points of Dispute, the court may disallow the variation or permit it only upon conditions, including conditions as to the payment of any costs caused or wasted by the variation. In Edinburgh v Fieldfisher LLP [2020] EWHC 862 (QB), Chamberlain J held that while the default position is that parties may vary Points of Dispute, this is subject to a general discretion to disallow the variation or to allow it upon conditions. This is an important discretion, without which it would be possible for parties to ambush their opponents by waiting until the last minute to file supplemental Points of Dispute raising points not previously heralded. The overriding objective must be borne in mind when exercising this discretion.

Hill J’s Decision

Hill J held that Point 23 was not compliant with PD 47, paragraph 8.2(b) or Ainsworth. Point 23 made general assertions without indicating which items they related to and failed to identify the specific items in the Bill of Costs which were challenged or make clear in each case the reasons why the individual items were in dispute. Point 23 was directly comparable to the contentious Points of Dispute in Ainsworth and Christodoulides v CP Christou LLP [2025] EWHC 214 (SCCO) and even less specific than those in O’Sullivan v Holmes and Hills LLP [2023] EWHC 508 (KB) and St Francis.

Hill J accepted that whether Points of Dispute are compliant is a binary question rather than a matter of discretion. However, she recognised that whether to strike out non-compliant Points of Dispute and whether to permit a variation under paragraph 13.10 were evaluative, discretionary questions that were inextricably linked.

Hill J rejected the Appellant’s argument that the Deputy Costs Judge had misdirected himself by finding that a “fairly broad-brush assessment” could have taken place based on Point 23 alone. She held that the Judge had recognised that it would be inappropriate to carry out the detailed assessment on a broad-brush basis and that his focus was on whether to adjourn the case to allow the Appellant more time to consider how to respond to the annotated schedule. What the Judge was saying was that the Appellant had been provided with sufficient information in the original Point 23 to understand, broadly, what the case against him was.

Hill J also rejected the Appellant’s argument based on Barton v Wright Hassall LLP [2018] UKSC 12 and Woodward v Phoenix Healthcare Distribution Ltd [2019] EWCA Civ 985 that the Judge had been wrong to criticise the Appellant for not chasing the Respondent for the schedule. She acknowledged at [88] that there was “an inherent logic in, and attractiveness to” the submission and that it raised “an interesting issue” about where the duty to assist the court conflicts with the absence of a duty to assist an opponent. However, she held that it would be wrong to criticise the Judge for failing to take into account a point not raised with him at the relevant time, as the evidence strongly suggested that these authorities were not cited to the Judge on 6 August 2024 but only at the costs stage on 8 November 2024.

Hill J accepted that the Deputy Costs Judge was not wrong to say that paragraph 13.10(2) afforded him “very wide powers,” as this chimed closely with Foster J’s reference in Celtic Bioenergy Ltd v Knowles Ltd [2022] EWHC 1223 (QB) to “a wide discretion.” However, she held that Ground 5 raised two distinct aspects: the first (whether “very wide powers” was a correct characterisation) failed; the second (whether the Judge nevertheless misapplied those powers) succeeded.

Hill J concluded that the Judge’s refusal to strike out Point 23 and his decision to allow the Respondent to rely on the schedule was wrong. She held that the Judge’s decision failed to give sufficient weight to the requirements of paragraph 8.2(b) and Ainsworth and failed to ensure that the paragraph 13.10(2) power was exercised in accordance with the overriding objective as required by Edinburgh and Celtic.

Hill J found that the adjournment was necessitated solely by the Respondent’s conduct regarding Point 23 and the schedule, not by issues with the Appellant’s bundle. The hearing on 5–6 August 2024 had addressed all the issues on the detailed assessment save for that relating to Point 23. If the Judge had decided to strike out Point 23 and disallow the schedule, the assessment would have concluded on 6 August 2024. The Judge had specifically held in his 6 August judgment that his criticism of the Appellant’s solicitor regarding the bundle “paled into insignificance” compared to his frustration at the parties’ lack of communication about the schedule, and the issues over the bundle did not prevent all the issues on the detailed assessment save for that relating to Point 23 being concluded on 6 August 2024. The Judge’s later recollection on 8 November that the bundle issue was “more important” was inconsistent with his original finding.

Hill J noted that the Respondent had been on notice that the Appellant’s position was that Point 23 was not compliant since 4 January 2024, some seven months before the detailed assessment hearing, yet had taken no steps to remedy the position until two working days before the hearing. The Respondent’s explanation for the delay—that the parties hoped to settle and avoid a hearing—was, Hill J observed, “entirely circular” because settlement was surely much more likely to be achieved if the Appellant understood the case against him in detail. This breach of paragraph 8.2(b) was even more egregious than that in Ainsworth, where there had been five months’ notice, and that in Celtic, where supplementary Points of Dispute had been provided around one month before the hearing.

The Judge’s decision meant that the detailed assessment process continued into a third day, leading to additional costs and delay. Hill J held that it was hard to see how that was consistent with the requirement in the overriding objective to deal with the case “justly and at proportionate cost,” bearing in mind that this requirement includes saving expense, dealing with cases expeditiously, and enforcing compliance with rules, practice directions and orders. The streamlined nature of detailed assessment proceedings was also relevant.

Hill J concluded that the Judge erred in principle and did not balance the various factors fairly in the scales, such that it was appropriate for the appellate court to intervene. The appeal was allowed.

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CPR 47.12 | Setting Aside A Default Costs Certificate | Application Denied

Default Costs Certificate Upheld Despite Variation For Irrecoverable VAT

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The Senior Courts Costs Office’s decision in MT Construction Limited v Frieze [2026] EWHC 813 (SCCO) addresses the requirements for setting aside a default costs certificate under CPR 47.12, both on the mandatory ground that the receiving party was not entitled to obtain it and on the discretionary ground that there is good reason for the detailed assessment to continue.

Background

MT Construction Limited brought an application for an injunction against Dennis Frieze and Anne Saunders. By an order dated 17 July 2025, the Defendants were ordered to pay the Claimant’s costs of that application on the indemnity basis, to be assessed if not agreed. The order also provided for a payment on account of £20,000, which was duly made.

The Claimant’s costs agents, TLS, prepared a Bill of Costs and Notice of Commencement and began attempts to serve the Service Pack on the Defendants’ solicitors, Hunters Solicitors, from September 2025 onwards. Those attempts were met with some difficulty: Hunters would not confirm whether the Bill had been received when first served by post, nor would they confirm whether they would accept service by email. On 17 October 2025, TLS served the Service Pack by first class post, and Royal Mail tracking confirmed delivery on 20 October 2025. The Notice of Commencement stipulated a deadline of 11 November 2025 for Points of Dispute.

Also on 17 October 2025, a telephone call took place between Mr Collins of TLS and Mr McGuinness of Hunters Solicitors. The parties’ accounts of that call diverged in a material respect. Mr McGuinness’s evidence was that Mr Collins had agreed in principle to grant a 21-day extension for Points of Dispute if service by email were accepted. Mr Collins’s evidence, supported by a file note made on the same day, was that the call recorded only that Hunters did not have instructions for accepting service by email, with no agreement as to any extension.

On Saturday 8 November 2025, Hunters sent an email purporting to record that an agreement had been reached: that if service by email were accepted, 21 days for Points of Dispute would be agreed, and confirming that this was agreeable to Hunters. By that point, Hunters had been in possession of the correctly served Service Pack for 19 days. On Tuesday 11 November 2025, TLS replied by email confirming that Points of Dispute remained due by close of play that day and warning that a request for a Default Costs Certificate (“DCC”) would be filed if Points of Dispute were not received by 4 pm. No Points of Dispute were served, and no application was made to the court for an extension of time. On 12 November 2025, TLS filed a request for a DCC, which was sealed by the court on 14 November 2025, communicated to Hunters by email the same day, and delivered by post on 17 November 2025.

On 28 November 2025, the Defendants issued an application to set aside the DCC, supported by a witness statement from Mr McGuinness. Hunters Solicitors were subsequently intervened into by the Solicitors Regulation Authority on 4 March 2026, and Mr McGuinness moved to Alpha Alexis Law Firm, where he continued to act under the supervision of Mr Mahesh Kakkar.

In open correspondence in December 2025, the Claimant offered to consent to the DCC being varied to remove the VAT element, which would have reduced the certified sum from £47,005 to £39,271. The Defendants did not accept that offer and instead pursued the application to set aside the DCC in its entirety. Points of Dispute were not served with the set-aside application and were not served until shortly before the hearing on 25 March 2026. The matter came before Deputy Costs Judge Erwin-Jones, with judgment handed down on 8 April 2026.

Costs Issues Before the Court

The central issue before the court was whether the Default Costs Certificate dated 14 November 2025 should be set aside under CPR 47.12. Two distinct grounds were in play.

The first was the mandatory ground under CPR 47.12(1), which requires the court to set aside a DCC if it is shown that the receiving party was not entitled to obtain it in the first place. The Defendants contended that a binding agreement had been reached to extend the deadline for Points of Dispute to 1 December 2025, such that the DCC had been obtained prematurely and the receiving party had not been entitled to it.

The second was the discretionary ground under CPR 47.12(2), which permits the court to set aside or vary a DCC where there is some other good reason for the detailed assessment proceedings to continue. Practice Direction 47, paragraph 11.2 sets out the procedural requirements for such an application: it must be supported by evidence, the court must consider promptness, and as a general rule the applicant must file a draft of the Points of Dispute it proposes to serve if the certificate is set aside.

Where the mandatory ground is not established and the court exercises its discretion under CPR 47.12(2), the three-stage framework from Denton v White [2014] EWCA Civ 906 applies. The court is required to assess the seriousness and significance of the breach, the reasons for it, and all the circumstances of the case, including the need to conduct litigation efficiently, proportionately, and in a manner that enforces compliance with the Rules, Practice Directions, and audits. It is clear that good reason for the failure must be established before the court proceeds to consider the wider circumstances.

A further, narrower issue arose in relation to the VAT element of the DCC. The Claimant had offered in open correspondence to consent to the DCC being varied to remove the VAT element, on the basis that the VAT certificate within the Bill confirmed that the Claimant was able to recover VAT as input tax from HMRC. The certified sum of £47,005 would, on that basis, be reduced to £39,271. The Defendants did not accept that offer and pursued the full set-aside application instead.

The costs of the set-aside application itself were also in issue, with the Claimant seeking a summary assessment of its costs of and occasioned by the application.

The Parties’ Positions

The Defendants argued, in the first instance, that the mandatory ground under CPR 47.12(1) was made out. Their case was that a binding agreement had been reached on 17 October 2025 during the telephone call between Mr Collins and Mr McGuinness, to the effect that a 21-day extension would be granted for Points of Dispute in exchange for acceptance of email service. The email of 8 November 2025 was said to record and give effect to that agreement, extending the deadline to 1 December 2025. On that basis, the DCC had been obtained before the extended deadline had expired and the receiving party had not been entitled to it.

In the alternative, the Defendants relied on the discretionary ground under CPR 47.12(2). They submitted that the failure to serve Points of Dispute in time was inadvertent, that Mr McGuinness had genuinely believed an extension was in place until 1 December 2025, and that the period around 11 November 2025 had been one of heavy professional commitments involving High Court work in Birmingham, Manchester, and London. The Defendants further argued that the draft Points of Dispute served before the hearing demonstrated genuine issues to be resolved on assessment, and that setting aside the DCC would cause no prejudice to the Claimant, given that £20,000 had already been paid on account and the remaining sum in dispute was relatively modest.

The Claimant resisted the application in its entirety. On the mandatory ground, the Claimant’s position was that no binding extension agreement had been reached. Mr Collins’s evidence, supported by his contemporaneous file note, was that the 17 October call had recorded only that Hunters did not have instructions to accept email service, with no agreement as to any extension. The Claimant submitted that the email of 8 November 2025, sent unilaterally by Hunters on a Saturday with one working day remaining before the deadline, could not constitute a written agreement of both parties for the purposes of CPR 2.11, and that TLS’s silence in response to that email did not amount to agreement, particularly given that TLS’s email of 11 November 2025 had expressly and unambiguously asserted the original deadline.

On the discretionary ground, the Claimant submitted that the breach was serious and significant, that no good reason had been established for it, and that the reasons advanced—a mistaken belief in an extension and pressure of other commitments—were insufficient. The Claimant further contended that the draft Points of Dispute were in general terms and did not identify with particularity what items were to be challenged or on what basis, and that it would be disproportionate for the assessment to continue given that the proposed costs of the hearing alone totalled over £17,000 in a claim where the net sum in dispute was approximately £39,000 and £20,000 had already been paid on account.

The Court’s Decision

Deputy Costs Judge Erwin-Jones refused the application to set aside the DCC, but varied it to remove the irrecoverable VAT element, reducing the certified sum to £39,271. The varied DCC was ordered to stand as a costs order in the proceedings in respect of the Claimant’s costs of the injunction application.

The Mandatory Ground: CPR 47.12(1)

The judge was satisfied that the Service Pack was validly served and delivered on 20 October 2025 as confirmed by Royal Mail tracking. The period of 21 days prescribed by CPR 47.19 therefore expired on 11 November 2025. On the factual dispute concerning the telephone call of 17 October 2025, the judge preferred Mr Collins’s version of events on the balance of probabilities. The judge found that the email of 8 November 2025 did not satisfy the requirements of CPR 2.11 for a binding written agreement to vary time. An email sent unilaterally by one party after having received documents by postal service, purporting to record the terms of an earlier oral conversation 20 days earlier which the other party denied having had in those terms, could not of itself constitute a written agreement of both parties. TLS’s immediate silence in response to that email did not constitute agreement, particularly since their email of 11 November 2025 expressly and unambiguously asserted the original deadline.

The judge was conscious that 8 November was a Saturday, leaving one whole working day before the deadline at a time when the deadline must have been apparent to Hunters. Having considered all of the evidence, the judge was not persuaded that a binding extension agreement had been reached. The mandatory ground under CPR 47.12(1) was therefore not established.

The Discretionary Ground: CPR 47.12(2)

Turning to the court’s discretion under CPR 47.12(2) and applying the Denton framework, the judge found that the breach was serious and significant. The Defendants’ solicitors had been in possession of the Bill by service since at least 20 October 2025 and almost certainly for several weeks if not over a month beforehand. The 21-day period prescribed by CPR 47.19 is sufficient in all but the most complex cases, and no Points of Dispute were served by the deadline or indeed before the week of the hearing.

Mr McGuinness’s reasons for the breach were that the failure was inadvertent, that he believed there was an extension in place until 1 December, and that the period around 11 November 2025 he was engaged in heavy High Court commitments in Birmingham, Manchester and London. The judge noted that there was no evidence about the systems in place at his firm for supervision, for receiving and distributing email and postal correspondence, no evidence about diary management systems, no explanation as to why email service was initially refused, and nothing to explain what the systems were to cover the work of a busy fee earner working all over the country.

Even accepting that Mr McGuinness believed there was an extension in place, that belief was not objectively reasonable in the absence of any written agreement from TLS and in view of the fact that the Bill of Costs and Notice of Commencement had been served on 20 October and sent by email previously. The unanswered email of 8 November 2025 did not constitute any agreement, but it was relevant that even if one assumed the deadline was 1 December 2025, Points of Dispute were still not served by that date.

The reason for the breach was at best a combination of a mistaken belief in an extension and the pressure of other commitments. These were not sufficiently good reasons within the meaning of the authorities. The court took into account the need to conduct litigation efficiently and at proportionate cost. The Defendants argued that the Points of Dispute now served demonstrated genuine issues to be resolved on assessment and that setting aside the DCC would cause no prejudice to the Claimant because the Claimant had already received £20,000 on account.

The judge found that the draft Points of Dispute served before the hearing were in general terms and did not identify with any specific particularity what items were to be challenged and on what basis. In any event, the mere existence of draft Points of Dispute in a claim of around £39,000 net where £20,000 had already been paid on account did not of itself demonstrate there was good reason for the assessment to continue. It would be disproportionate for it to do so in any event. The proposed costs schedules for the hearing alone together totalled over £17,000.

On promptness, there was a delay of between 14 and 11 days before the application to set aside was issued. Mr McGuinness explained this by reference to the SRA intervention and transition. The judge took that into account but noted that the SRA intervention did not occur until 4 March 2026, well after the application was issued. The delay in November was not explained by that.

The judge was not satisfied that a good reason had been shown for the detailed assessment to continue. The mandatory grounds failed and the discretionary grounds also failed. The application was therefore refused.

Variation for VAT

The Claimant had offered in open correspondence to consent to the DCC being varied to remove the VAT element. In any event, the VAT certificate within the Bill confirmed that the Claimant was able to recover VAT as input tax from HMRC. The DCC was varied under CPR 47.12(2) to reduce the certified sum to £39,271. The payment of £20,000 made on account on 14 August 2025 was to be credited against the varied DCC sum in the ordinary way upon enforcement.

Costs of the Application

The Claimant had succeeded in resisting the application to set aside the DCC. The Defendants brought the application and failed on a substantive ground. The set-aside was refused. The variation of the DCC to remove VAT was, on the Claimant’s open offer, always going to happen. The Defendants chose not to accept the offer to vary and instead pursued a full set-aside. Accordingly, the Defendants were ordered to pay the Claimant’s costs of and occasioned by the application. The judge summarily assessed those costs at £4,250, noting that no VAT was claimed.

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Provisional Assessment Set Aside Under CPR 3.1(7) For Material Breach Of Filing Duty

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The Senior Courts Costs Office’s decision in MH v CH (By Her Litigation Friend the Official Solicitor) [2026] EWHC 238 (SCCO) confirms that CPR 3.1(7) remains available to challenge a Provisional Assessment Order where the receiving party failed to file the paying party’s complete Points of Dispute.

Background

This matter arose from detailed assessment proceedings following a costs order made in the Court of Protection. By an order dated 15 December 2023, HHJ Hilder ordered MH to pay 50% of CH’s costs. CH’s solicitors, Irwin Mitchell LLP, prepared a Bill of Costs totalling £19,233.93, which was served on MH on 1 November 2024.

On 22 November 2024, MH served his Points of Dispute by email. These comprised four documents: Precedent G; a Note in Relation to Points of Dispute; an annotated Bill of Costs; and a skeleton argument from a prior Court of Appeal application. Replies were served by CH on 13 December 2024.

On 15 April 2025, CH lodged the N258 bundle with the court to initiate a provisional assessment. It was later accepted by CH’s solicitor, Mr Cruise, in a witness statement dated 21 May 2025, that the bundle omitted two of the four documents comprising MH’s Points of Dispute — the annotated Bill of Costs and the Note — and also omitted MH’s open offer. Mr Cruise conceded the omission was a mistake and that all documents should have been filed.

Unaware of the omission, Deputy Costs Judge Bedford conducted the provisional assessment on 29 April 2025. The resulting Written Reasons repeatedly noted an inability to understand many of the objections. The judge later attributed this difficulty entirely to the absence of the complete documentation. The Provisional Assessment Order (PA Order) was issued the same day.

On 6 May 2025 — within seven days of the PA Order — MH issued an application to set aside the PA Order pursuant to CPR 3.1(7). MH declined to request an oral hearing under CPR 47.15(7). The application was heard on 24 June 2025. During that hearing a discrete question arose as to whether a provisional assessment order is final or interim prior to expiry of the 21-day period in CPR 47.15(7); the judge adjourned to receive written submissions on that point. Written submissions were filed by CH on 23 July 2025 and by MH on 28 July 2025, culminating in this judgment.

Costs Issues Before the Court

The central issue was whether a paying party may apply to set aside a Provisional Assessment Order under CPR 3.1(7) within seven days of its issue, as an alternative to requesting an oral hearing under CPR 47.15(7). Counsel informed the judge that there was no binding authority — indeed no authority at all — on this point, and the judge determined that a written judgment would therefore be of utility. Subsidiary questions included: whether the court’s general case management powers remain available where a specific procedural rule exists; whether the failure to file a complete set of Points of Dispute meant the decision was not a provisional assessment in the sense contemplated by CPR 47.15(7); and, if CPR 3.1(7) was engaged, whether the threshold test was met. The application also raised, but adjourned for later determination, issues of alleged misconduct under CPR 44.11 and whether a prior payment constituted a concluded agreement on costs.

The Parties’ Positions

MH, acting in person, argued the PA Order was null and void because CH had failed to comply with the mandatory requirements of PD 47 para 14.3 by not filing his full Points of Dispute and open offer with the N258 bundle. He submitted CPR 3.1(7) was available and drew analogies with other CPR set-aside mechanisms — including the power to set aside a default costs certificate under CPR 47.12(1) — to support the proposition that the rules provide redress where an order is obtained irregularly. MH contended that CPR 47.15(7) was not engaged because the provisional assessment process had never been properly initiated.

CH, represented by Mr Moss of Counsel, argued that the specific and self-contained code for challenging a provisional assessment was CPR 47.15(7), which required a request for an oral hearing within 21 days. MH’s failure to do so meant the PA Order had become binding. CH submitted that the general power in CPR 3.1(7) could not circumvent this specific rule, relying on the principle of lex specialis and the authorities of Terry v BCS Corporate Acceptances Ltd [2018] EWCA Civ 2422 and Deutsche Bank AG v Unitech Ltd [2016] EWCA Civ 119. In the alternative, CH argued that even if CPR 3.1(7) was available, the PA Order was a final order, the threshold was not met, and the circumstances fell woefully short of exceptional.

The Court’s Decision

Deputy Costs Judge Bedford granted the application and set aside the PA Order.

Availability of CPR 3.1(7)

The judge rejected the submission that CPR 47.15(7) ousted the general case management powers. She held that the two rules could operate cohesively, addressing different types of challenge. CPR 47.15(7) provides a mechanism to review items within a provisional assessment — decisions on hourly rates, individual bill items and the like. These items are defined by the four corners of the Points of Dispute, as illuminated by Ainsworth v Stewarts Law LLP [2020] EWCA Civ and PD 47 para 8.2. A jurisdictional challenge to whether the assessment was correctly constituted at all falls outside the scope of CPR 47.15(7) and may be addressed under CPR 3.1(7). She noted that CPR 3.1(1) expressly provides that the court’s case management powers are available in addition to those granted by specific rules, and that PD 47 para 14.2(2) — which lists the CPR provisions excluded from the provisional assessment regime — does not exclude CPR 3.1.

The authorities of Terry and Deutsche Bank were distinguished on the same ground: each confirmed that a general rule gives way to a specific rule, but that principle has no application where the two rules address distinct questions and operate in tandem.

Failure to File Complete Documents

The judge found that CH’s failure to file the complete Points of Dispute was a material breach of the mandatory obligation in PD 47 para 14.3(e). Critically, the provisional assessment is initiated unilaterally by the receiving party and the paying party has no involvement or control over what is filed. She drew an analogy to the duty of candour in without-notice applications: the duty on the receiving party to file all documents comprising the paying party’s Points of Dispute is stringent. She observed that Points of Dispute spread across multiple documents — including annotated bills and supplementary notes — are the norm rather than the exception in costs practice.

Because PD 47 para 14.3(e) had not been complied with, the resulting decision was not a provisional assessment in the sense contemplated by CPR 47.15(7). The consecutive steps in the workflow from CPR 47.15(4) onwards — including the 21-day period for requesting an oral hearing — were not properly engaged. The time for requesting a compliant oral hearing under CPR 47.15(7) and (8) had not properly begun to run.

Application of the CPR 3.1(7) Test

Applying the principles in Tibbles v SIG PLC [2012] EWCA Civ 518, and having regard to Lewison LJ’s observations in Vodafone Group PLC v IPCom GmbH and Co [2023] EWCA Civ 113, the judge found the threshold for exercising CPR 3.1(7) was met. The facts on which the PA Order was made had been misstated through omission — an incontrovertible fact accepted by CH’s own solicitor. The absence of the documents had axiomatically undermined the basis of the judgment, and the application was made promptly within seven days.

The judge declined to determine whether the PA Order was final or interim, finding it unnecessary to do so. The facts comfortably met the higher test of exceptional circumstances applicable to final orders in any event: the receiving party had failed to comply with a mandatory filing requirement in a without-notice context, the court had proceeded on an incorrect basis and wasted time on a flawed process, and a defaulting party ought not to benefit from its own default where the court has been inadvertently misled and a prompt in-time application has been made. For completeness, the judge further held that even if CPR 47.15(7) had been engaged, the same facts constituted exceptional circumstances within the meaning of that rule.

Case Management Directions

She exercised the power under CPR 47.15(6) to remove the matter from the provisional assessment regime, directing that it proceed to a one-day detailed assessment hearing. She concluded that an oral hearing was likely to be required in any event and it was more proportionate to proceed directly. All outstanding issues — including the CPR 44.11 misconduct application and the question of any concluded costs agreement — were adjourned to that hearing.

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CPR PD 47 Para 8.2 | Costs Judge’s “Hands Tied” By Non-Compliant Points Of Dispute

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The Senior Courts Costs Office’s decision in Aareal Bank AG v Lumineau [2025] EWHC 3299 (SCCO) demonstrates the practical consequences of Ainsworth-non-compliant points of dispute and provides guidance on hourly rates above guidelines and leading counsel instruction where prior involvement exists.

Background

This was a detailed assessment of costs before Deputy Costs Judge Lightman, delivered as an approved transcript. The receiving party, Aareal Bank AG, was a third party in the underlying litigation who was awarded its costs by order dated 12 September 2024 [§3]. The underlying proceedings concerned an application by the paying parties to stay a liquidation and bring the company back under their control, with a later change of position seeking the removal of directors [§19, §30]. The proceedings took place over a relatively short but intense period between June and September 2024 [§2]. The detailed assessment concerned a bill of costs submitted by Aareal, against which the paying parties, Emmanuel Lumineau and Thomas Schneider, served points of dispute. The central matters in dispute related to the level of solicitors’ hourly rates, the instruction and fees of leading counsel, and the adequacy of the paying party’s points of dispute.

Costs Issues Before the Court

The court was required to determine three principal costs issues. First, whether the hourly rates claimed by the receiving party’s solicitors were reasonable, given that some exceeded the applicable guideline rates for London 2 (Grade A £398, Grade B £308, Grade C £260, Grade D £148 from 1 January 2024) [§2]. Second, whether it was reasonable and proportionate for the receiving party to have instructed leading counsel for the application and, if so, whether the level of his fees and the work done in conjunction with junior counsel were recoverable. Third, whether the paying party’s points of dispute complied with the requirements of CPR Practice Direction 47, paragraph 8.2, and the consequences of any non-compliance, particularly in light of the Court of Appeal decision in Ainsworth v Stewarts Law LLP [2020] EWCA Civ 178.

The Parties’ Positions

The paying party contended that the solicitors’ hourly rates should be reduced to the SCCO guideline rates for London 2 effective from 1 January 2024. They relied on the principle from Samsung Electronics Co Ltd v LG Display Co Ltd [2022] EWCA Civ 466 that a “clear and compelling justification” is needed to exceed guideline rates [§4]. On counsel’s fees, the paying party argued that instructing counsel at all was unnecessary, as a senior fee earner should have been capable of handling the work [§13]. In the alternative, they submitted that the instruction of leading counsel was an extravagance, relying on the decision in Coram v DR Dunthorn & Son Ltd [2024] EWHC 672 (KB), which the judge noted was a fact-specific decision [§15, §20]. They also challenged numerous specific items of counsel’s work and associated solicitor time.

The receiving party argued that the complexity and importance of the matter, including insolvency issues and urgent interim applications, justified rates above the guidelines [§19]. Regarding counsel, they submitted that the instruction of leading counsel was necessary due to the case’s complexity and his prior involvement in the matter dating back several years before his appointment as KC in 2020 [§11–12, §17]. They defended the concurrent instruction of junior counsel as a proportionate measure to cover whilst leading counsel was on holiday and to assist in the preparation of the skeleton argument [§31, §34]. In response to the points of dispute, the receiving party argued that they failed to comply with CPR PD 47, paragraph 8.2, as interpreted in Ainsworth, because they did not state concisely the nature and grounds of dispute for individual items, instead relying on generic objections [§21–26]. They argued that the points of dispute were non-compliant with PD 47 and should be struck out; however, the judge did not formally strike them out and instead assessed the items within the constraints identified in Ainsworth [§30, §37].

The Court’s Decision

On the issue of solicitors’ hourly rates, the judge acknowledged his general reluctance to depart from the guidelines but found the case to be “unusual” and of sufficient complexity to justify a modest uplift [§8]. He stated that he had “seen enough to say to anyone that this is an unusual case”, warranting a modest departure, without expressly endorsing all aspects of the receiving party’s characterisation of the case’s complexity [§8]. He did not, however, allow the full rates claimed. He reduced a claimed partner rate of £433.50 to £410 (against a guideline of £398) [§9]. For the associate rate claimed at £306, he allowed £275 [§9]. Other rates at or below the guidelines were left undisturbed.

Concerning the instruction of leading counsel, the judge found it was not unreasonable to instruct Mr Fisher, given his significant prior involvement in the matter dating back several years and predating his appointment as KC in 2020 [§11–12, §17]. The judge noted that it was “not unreasonable at all to instruct Mr Fisher, who had previous experience of this case” [§12]. This represents an important distinction from the scenario in Coram, where leading counsel was newly instructed; the judge treated Coram as a fact-specific decision of no direct application [§20]. However, he questioned whether the matter was sufficiently complex to justify leading counsel charging leading counsel’s rates throughout the whole period, stating that he was “not convinced” on this point [§31]. The judge therefore approached the specific items of counsel’s work on the basis that while leading counsel’s involvement was reasonable, his fees should be moderated to reflect a more junior level for much of the work. He reduced a number of leading counsel items on an item-by-item basis, often by reference to a junior counsel rate: item 49 was reduced from £2,550 to £1,125 [§41]; item 51 from £1,195 to £862.50 [§42]; and item 53 to £1,275 [§42]. Items solely relating to junior counsel’s reading in (items 15 and 16) and initial advice (item 17) were allowed in full, as the points of dispute did not adequately challenge them on an item-by-item basis [§37–38].

On the procedural issue, the judge applied the Ainsworth principles. He held that the paying party’s points of dispute, while identifying a general point of principle (satisfying CPR PD 47 para 8.2(a)), failed to “state concisely the nature and grounds of dispute” for individual items as required by CPR PD 47 para 8.2(b) [§23, §29]. The generic objection to counsel’s fees did not specify why each challenged item was unreasonable. The judge’s frustration with the outcome was palpable: he stated that his “hands are tied” and that he “do[es] not like it” [§37]. As a matter of principle, he refused to entertain reductions based on these non-compliant objections for several items, including approximately three hours of solicitors’ attendance at the hearing [§44]. This procedural failure prevented the paying party from advancing item-specific challenges in respect of a number of entries.

CPR 44.11 | 75% Costs Reduction For Egregiously Defective Bill | Solicitors Remain Vicariously Liable For Costs Draftsman Failures

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The Senior Courts Costs Office’s decision in Hyder v Aidat-Sarran [2024] EWHC 3686 (SCCO) establishes that solicitors bear full vicarious responsibility for costs draftsmen’s failures and cannot avoid severe sanctions by blaming their agents when bills contain egregious, persistent, and unrectified defects.

Background

The matter concerned detailed assessment proceedings in the Senior Courts Costs Office before Deputy Costs Judge Roy KC. The substantive litigation between the parties had concluded, and the claimant, Rashid Hyder, was seeking to recover his costs. The procedural history was marked by difficulties with the service of a compliant bill of costs by the claimant. An unless order was made requiring service of the bill by a specified date. The claimant served a bill one day after the deadline, and this bill was found to contain multiple and significant defects. The defendants, Robert Aidat-Sarran and Humwattie Aidat-Sarran, raised these defects in points of dispute served in response to the bill. The claimant then served a second, electronic bill, which not only failed to rectify the serious problems with the paper bill but added further defects. This led to the defendants making an application to strike out the claim for costs pursuant to CPR 44.11. The claimant, in turn, made an application for relief from sanctions for the late service of the initial bill.

Costs Issues Before the Court

The court was required to determine two distinct but related applications. The first was the claimant’s application for relief from sanction under CPR 3.9 for the late service of his bill of costs. The second was the defendants’ application under CPR 44.11 for the court to disallow all or part of the costs, seeking the draconian sanction of striking out the bill entirely due to the claimant’s multiple and serious failures in the preparation and service of both the original and the subsequent bill.

The Parties’ Positions

The claimant sought relief from sanction, arguing that the breach—serving the bill one day late—was neither serious nor significant when considered in isolation. It was submitted that the service of the bill, albeit defective, constituted belated compliance with the unless order. On the defendants’ application, the claimant accepted there were defects but argued that strikeout was a disproportionately severe sanction. The claimant’s counsel offered an apology for the failures at the hearing, although this came only at around midday on the day of the hearing itself.

The defendants opposed relief from sanction, contending that the bill was so seriously defective that its service could not be considered compliance with the order at all. On their own application, the defendants argued that the multiple, egregious, and persistent defects in both bills, coupled with a complete failure to address or rectify them even after they were highlighted in the points of dispute, amounted to unreasonable or improper conduct warranting the bill being struck out in its entirety. They submitted that the court could have no confidence in any future bill served by the claimant. The defendants’ witness statement of 22 August 2024 had clearly set out all these failings.

The Court’s Decision

The court granted the claimant’s application for relief from sanction. Applying the first stage of the Denton test, Deputy Costs Judge Roy KC found that the breach of the unless order was the one-day delay in service. The service of a defective bill was held to constitute belated compliance with the order, which only required “service of a bill.” The judge distinguished the situation from cases where a served document is “gibberish” or blank, citing CNM Estates (Tolworth Tower) Limited v Carvill-Biggs [2023] EWCA Civ 480. Consequently, the one-day delay was not serious or significant, and relief was granted.

On the defendants’ application under CPR 44.11, the court found that the claimant’s conduct met the threshold for the rule to be engaged. The judge made seven key findings at paragraphs 10-20 of the judgment:

      • First, the original bill contained multiple significant failures which the judge described as “egregious” when viewed in the round.
      • Second, none of these defects were rectified in the second bill, the electronic bill, which the judge found “absolutely astonishing.”
      • Third, the second bill not only failed to rectify the serious problems with the paper bill but added further defects, which was “even more astonishing” given that the need to ensure a defect-free bill had been clearly flagged in the points of dispute.
      • Fourth, all these failings were clearly set out in the defendants’ witness statement of 22 August 2024. Fifth, the claimant’s solicitors displayed a “serious and troubling lack of insight and contrition” by failing to address the defects, serve any evidence, or even acknowledge these failings before the hearing, with an apology only coming via counsel at around midday on the hearing day itself.
      • Sixth, the judge found it was not open to the claimant’s solicitor to blame the costs draftsman. As a matter of law under Gempride v Bamrah [2018] EWCA Civ 1367, the costs draftsman is the solicitor’s agent and the solicitor is vicariously responsible for all the costs draftsman’s failings as if the solicitor had performed the work themselves. In any event, there had been serious direct failings on the solicitor’s part: solicitors must apply superintendence and oversight to what a costs draftsman does, and the defects here were so obvious that the solicitor should have identified them; the solicitor should have been proactive to ensure compliance in time and properly; some failings, such as failures to certify, were purely those of the solicitor and were very basic; and by 22 August 2024 at the latest, in light of the defendants’ statement, the solicitors could not have had any basis to place reliance upon the costs draftsman, yet the compounding failures continued.
      • Seventh, the judge was satisfied that both limbs of CPR 44.11(a) and (b) were met: there had been non-compliance with the rules, and there had been unreasonable conduct, meaning conduct which does not admit a reasonable explanation. In summary, the judge found there had been “multiple compound breaches” that were “serious”, “persistent”, “unexplained”, and “inexcusable.”

While not making a positive finding of improper conduct without “the full picture,” the judge noted at paragraph 19 that serving an unchecked bill without caveat came “very close” to improper conduct and was at least arguably reckless as to the possibility of the court or defendant being misled.

Despite the seriousness of the conduct, the court declined to strike out the bill. The judge held that strikeout was the most draconian sanction and that a judge should always give “very anxious consideration” to whether any lesser sanction could properly meet the justice of the case. On a “very narrow balance,” the court was persuaded that lesser sanctions were appropriate. The court noted that in Gempride itself, despite serious misconduct, there was a substantial reduction but the bill was not struck out entirely, and this precedent tended to point against strikeout being appropriate in this case. The court also considered that the concerns about proportionality and confidence in any redrawn bill could be addressed by the orders it proposed to make.

Instead, the court imposed a severe costs sanction, disallowing 75% of the claimant’s assessed costs under CPR 44.11. This meant that whatever sum the bill was ultimately assessed at on detailed assessment, the claimant would recover only 25% of that total assessed sum. The judge described this as a “stern sanction by CPR 44.11 standards” but remained of the view that it was appropriate, noting that the claimant and his solicitors could “consider themselves quite fortunate that the bill is not struck out entirely.”

The court also disallowed interest on the claimant’s costs from 30 July until whatever date it was agreed the redrawn bill should be served by. The judge’s initial inclination had been to disallow all interest, but this was rejected as it would amount to double jeopardy in circumstances where 75% of the costs had already been disallowed.

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Default Costs Certificate Set Aside Due To Unexplained 300% Costs Increase Despite Defective Application

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Background

The matter concerned an application to set aside a Default Costs Certificate in detailed assessment proceedings arising from family litigation. The underlying case was a divorce petition under Case Number BV20D09765, where an order had been made by HHJ Poole on 15 May 2024 requiring the Respondent (H) to pay the Petitioner’s (W) costs. Those costs were to be assessed on the standard basis from 1 June 2020, in respect of the divorce petition and incidental applications, including applications by H for declarations regarding the validity of the divorce. The assessment was to be conducted in accordance with Regulation 21 of the Civil Legal Aid (Costs) Regulations 2013, with both parties having instructed solicitors on record.

On 11 February 2025, W served a Notice of Commencement of Bill of Costs, which was emailed to H’s solicitor and formally served by post on 12 February 2025. The notice, in Form N252, specified that points of dispute were to be served by 6 March 2025, and it included a warning that failure to do so would lead to an application for a Default Costs Certificate for the full amount of the bill. H did not serve points of dispute by the deadline. On 6 March 2025, W’s representatives applied for a Default Costs Certificate, which was issued on 11 March 2025 and served on H’s solicitors. H then issued an application to set aside the Default Costs Certificate on 21 March 2025.

During this period, there were assertions regarding the health of both parties. W was noted to have been incapacitated, as evidenced by a sick note dated 27 February 2025. H was also reported to have been unwell, although the only medical evidence provided was a sick note dated 10 April 2025, which post-dated the relevant period. H had agreed to vacate a parallel hearing in March 2025, but this was attributed to Ramadan rather than health issues. H’s solicitor indicated that delays were partly due to H’s need to secure funds for a payment on account to his legal team and that he was in no position to finalise instructions until 3 March 2025.

Costs Issues Before the Court

The primary issue before the court was whether the Default Costs Certificate should be set aside pursuant to CPR 47.12. The application required consideration of whether H had shown a good reason for the certificate to be set aside and whether the application complied with Practice Direction 47, paragraph 11.2(3), which mandates that a draft of the proposed points of dispute be filed with the application. Additionally, the court had to evaluate the conduct of both parties in the context of the overriding objectives and the principles from Denton v White [2014] EWCA Civ 906 regarding relief from sanctions.

The Parties’ Positions

H sought to set aside the Default Costs Certificate under the discretionary limb of CPR 47.12(2). It was accepted on behalf of H that the first two stages of the Denton test were not met, but it was argued that the certificate should be set aside for several reasons. Firstly, H’s representatives had made an in-time request for an extension to file points of dispute on 5 March 2025, which was not expressly refused but was not agreed due to W’s costs lawyer lacking instructions. Secondly, it was questioned whether W had given specific instructions to reject the extension request. Thirdly, H emphasised a significant and unexplained increase of approximately 300% between the costs claimed in a prior N260 statement from the final hearing and the current bill of costs, arguing that this discrepancy could not be justified solely by the difference between legal aid rates and market rates. H contended that allowing the certificate to stand would diminish matrimonial assets unfairly.

W opposed the application, asserting that the Notice of Commencement had clearly warned of the consequences of non-compliance. W’s costs lawyer had been unable to obtain instructions to grant an extension by the deadline, and the application for the Default Costs Certificate was made in accordance with the pre-authorised course of action. W argued that H’s delays, including the failure to file points of dispute promptly and the subsequent delay in applying to set aside the certificate, were not sufficiently justified. W also maintained that the increase in costs was attributable to legitimate differences between legal aid billing and inter partes costs assessment, including variations in hourly rates, claimable items, and assessment bases.

The Court’s Decision

The court granted the application to set aside the default costs certificate under CPR 47.12 dated 11 March 2025 and permitted H to rely on the points of dispute served on 26 March 2025. However, no costs were awarded to either party in respect of the application.

In reaching this decision, the court found that H’s request for an extension on 5 March 2025 had not been rejected out of hand; rather, W’s costs lawyer had been unable to secure instructions in time. The court noted that W’s legal team had been pre-authorised to apply for a Default Costs Certificate upon non-compliance, but criticised their failure to provide prior warning to H’s team before making the application, describing their conduct as “only very slightly short of opportunistic.” Nevertheless, the court emphasised that H’s team had been aware of the deadline and the lack of authority to extend, and there was no adequate explanation for the delays between the issuance of the certificate and the application to set it aside, or for the initial failure to include draft points of dispute with the application.

The court placed significant weight on the unexplained 300% increase in costs between the N260 and the current bill. While acknowledging that differences between legal aid and inter partes costs could account for some variance, the court found the magnitude of the increase sufficiently concerning to warrant setting aside the certificate, given the potential impact on matrimonial assets. The court noted that W’s team had not adequately addressed this discrepancy before or during the application.

Applying the principles from Denton, the court concluded that neither party had acted in a manner that furthered the overriding objective of dealing with cases justly and at proportionate cost. Consequently, while the Default Costs Certificate was set aside to allow detailed assessment to proceed, the court exercised its discretion to make no order as to the costs of the application.

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Defendants Fail To Have US$3.7m Default Costs Certificate Set Aside

CPR 47.12 | Setting Aside A Default Costs Certificate | Application Denied

Failure To File And Serve An N260 Statement Of Costs

CPR 44.2(8) | No Restriction To Ordering A Payment On Account

NO EXCUSES: RELIEF FROM SANCTIONS REFUSED FOLLOWING LATE FILING OF A COSTS BUDGET

The Importance Of Accurate Costs Estimates

Security For Costs Application Under CPR 25 | Financial Difficulties and Late Claims

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Security For Costs Ordered At 75% Of Estimated Costs Due To Late Part 20 Claim

Baker Botts (UK) LLP v Carbon Holdings Limited & Ors [2025] EWHC 2225 (Comm)

In Baker Botts (UK) LLP v Carbon Holdings Ltd & Ors, the Commercial Court determined two principal costs issues: an application for security for costs against a Part 20 claimant and a late challenge to the reasonableness of the claimant’s fees. The decisions provide guidance on both the financial threshold for security applications and the common law assessment of solicitors’ fees.

Background | Unpaid Legal Fees and Late Counterclaim

Baker Botts claimed approximately £4.4 million in unpaid legal fees from Carbon Holdings Limited and EHI Limited under various engagement letters between 2019 and 2021. In May 2024, Carbon Holdings joined its subsidiary Egypt Hydrocarbon Corporation SAE (“EHC”) to the proceedings through a Part 20 claim, alleging joint liability for the fees.

EHC subsequently brought its own Part 20 claim against Baker Botts, alleging professional negligence in connection with the settlement of arbitration proceedings in March 2020. EHC claimed damages of at least US$150 million. Crucially, EHC raised no complaint about the settlement or Baker Botts’ performance until this Part 20 claim, some four years after the events.

The Security For Costs Application | Financial Difficulties and Late Claims

Baker Botts applied for security for costs of £2,016,777.45 against EHC under CPR 25.26 and 25.27 on two grounds: EHC’s residence outside the jurisdiction (Egypt) and reason to believe it would be unable to pay costs if ordered to do so.

EHC’s Financial Position

The court found compelling evidence of EHC’s financial difficulties:

  • Accumulated losses of US$384 million as at December 2023
  • Negative working capital of US$677 million
  • Outstanding debt of US$648 million with inability to meet principal and interest payments
  • Breach of financial covenants requiring a debt settlement agreement in June 2023
  • Default on that settlement agreement, necessitating an addendum in July 2024
  • Auditors’ emphasis of material uncertainty about going concern status

EHC’s Response | Claims of Financial Transformation

EHC argued its position had been transformed since July 2024 through:

  • The debt settlement addendum
  • A working capital facility of US$70 million until September 2025
  • Improved sales performance
  • Undertakings by “old shareholders” to bear financial amounts ruled against EHC

The Court’s Analysis | Substance Over Claims

David Elvin KC sitting as Deputy High Court Judge applied the principles from Explosive Learning Solutions Ltd v Landmarc Support Services Ltd [2023] EWHC 1263 (Comm), noting that whilst an applicant need not prove likelihood of inability to pay, there must be justification and evidence for that belief.

The court rejected EHC’s transformation claims, finding:

“The ‘transformation’ in EHC’s finances claimed by Mr James is significantly lacking in substance… The cashflow projections provided by EHC… significantly overstate EHC’s probable cashflow in Q4/24.”

Critical factors included:

  • The working capital facility was uncertain in effect, did not clearly provide for litigation costs, and expired in September 2025 before litigation would conclude
  • No supporting evidence for claimed sales improvements
  • Complete lack of information about unnamed “old shareholders'” financial resources
  • The addendum probably represented banks seeking to limit losses rather than genuine improvement

Security Quantum | 75% Discount Applied

On quantum, the court applied principles from Pisante v Logothetis [2020] Costs LR 1815, adopting a broad-brush approach rather than detailed assessment.

Starting from an assessment of £2,000,000, the court applied a 75% figure (awarding £1,500,000) reflecting:

  • The late timing of EHC’s Part 20 claim (brought four years after the alleged breach)
  • Lack of prior intimation of any complaint
  • The substantially distinct nature from the main claim
  • Normal litigation uncertainties

The court rejected EHC’s argument that security should be limited to prospective costs only, given the Part 20 claim was not made until May 2024, well after the main proceedings commenced.

Reasonableness of Fees | Common Law Assessment Jurisdiction

A separate costs issue arose from the defendants’ late Points of Dispute challenging the reasonableness of Baker Botts’ fees. These were served in January 2025, over two years after the most recent invoice dated August 2022.

Late Service | Highly Unsatisfactory But Permitted

The court found the delay “highly unsatisfactory” but permitted the challenge, noting:

  • The Defence already pleaded the implied term of reasonableness at paragraphs 25 and 26
  • Baker Botts bore the burden of proving reasonableness under Turner & Co v O Palomo SA [2000] 1 WLR 37
  • This common law jurisdiction exists regardless of formal assessment requests under the Solicitors Act 1974

Summary Judgment on Partial Recovery

The court granted summary judgment for invoices totalling US$1,026,053.67 representing work undertaken directly for Carbon Holdings and EHI, even accepting the defendants’ case about subsidiary liability. However, the court referred assessment of reasonableness to the Costs Judge.

The court emphasised that the burden of proving fees are reasonable rests with the solicitor, whether under common law or the Supply of Goods and Services Act 1982.

Key Principles for Practice

Security for Costs Applications

The decision confirms several practical points:

Financial evidence matters more than recent arrangements: Courts will look beyond debt restructuring and working capital facilities to underlying trading performance and debt history. Recent refinancing may be viewed skeptically as banks protecting their position rather than genuine improvement.

Late claims attract less favorable treatment: The court’s 75% award (rather than the more typical 60-70% discount) reflected the tactical and belated nature of EHC’s counterclaim.

Prospective vs historic costs: Security may cover both incurred and future costs where the Part 20 claim is brought well after main proceedings commenced.

Fee Reasonableness Challenges

Common law jurisdiction remains available: Solicitors cannot rely on expiry of Solicitors Act time limits to avoid reasonableness challenges where fees are disputed in ongoing litigation.

Burden always on solicitor: The solicitor bears the burden of proving reasonableness, regardless of whether a formal assessment is requested.

Late challenges may still succeed: While procedural delay is “highly unsatisfactory,” substantive challenges to reasonableness may still be permitted where properly pleaded.

Conclusion

The Baker Botts decision demonstrates the court’s willingness to look beyond surface financial arrangements to underlying commercial reality when assessing security applications. For solicitors, it confirms that the common law obligation to charge only reasonable fees remains enforceable through ordinary litigation, providing clients with protection even where statutory routes may be time-barred.

The 75% security award reflects judicial recognition that late, tactical counterclaims should not receive the same treatment as genuine disputes raised promptly. This approach may influence how courts approach security applications in similar circumstances where professional negligence counterclaims emerge only after fee recovery proceedings commence.

Security for costs and the role of court approved costs budgets

Security for costs and the role of court approved costs budgets – SARPD Oil v Addax Energy CA decision on “deliberate reticence” – Court of Appeal decision directly relevant to security for costs under CPR 25.27(b)(ii) and the “reason to believe” test, with analysis of financial disclosure obligations.

£6m Security For Costs Denied As Escrow Funds In UK Account Deemed Sufficient – Virgo Marine v Reed Smith – High Court Commercial Court case on CPR 25.27 applications, discussing availability of funds and the “reason to believe” test with similar quantum considerations.

Additional Security For Costs Ordered For Inquiry And Detailed Assessment – Arcadia v Bosworth – High Court Commercial Court decision on additional security orders and material changes in circumstances, relevant to quantum and percentage discounting.

The Cost Of Providing Security For Costs | Court of Appeal Decision – Court of Appeal guidance on form of security and discretionary considerations under CPR 25.13, relevant to the banker’s draft requirement in Baker Botts.

The principles from Explosive Learning Solutions Ltd v Landmarc Support Services Ltd were applied by the court in assessing EHC’s financial position.

 

Court Orders Inspection In s70 Solicitors Act Assessment Post Service Of Points Of Dispute In The Absence Of Informative Replies

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In Diagnostics.AI Limited v Dentons UK & Middle East LLP [2025] EWHC 2071 (SCCO), Costs Judge Nagalingam addressed a critical procedural issue in solicitor-client assessments: can the court order inspection of a solicitor’s files after points of dispute have been served? The case involved disputed bills exceeding £2 million (even after a substantial credit note) and demonstrates the costs risks of adopting an “obstructive” stance in assessment proceedings.

The Costs Dispute | An Unusual Procedural Position

The assessment proceedings had taken an unusual procedural route. The parties had agreed by consent to dispense with the standard inspection stage before service of points of dispute under CPR 46.10. This collaborative approach initially appeared constructive, with multiple consent orders and stays for settlement negotiations.

However, the cooperation foundered when the claimant served comprehensive 72-page points of dispute raising detailed objections to the bills. The defendant’s response was limited to a four-page reply addressing only preliminary points, declining to engage with any item-by-item challenges. This minimal engagement prompted the claimant’s application for inspection to break the negotiation deadlock.

The Jurisdictional Challenge | Multiple Routes to Inspection

The defendant, represented by Jamie Carpenter KC, mounted what the judge described as an “all or nothing response”, arguing the court lacked jurisdiction to order inspection at this procedural stage. The defendant contended that:

    • CPR 31.12(1) provided the only mechanism for ordering inspection
    • The application was defectively drafted
    • The request was “far too wide” and sought inspection of their “entire file”

Costs Judge Nagalingam rejected these arguments, finding multiple jurisdictional routes:

    1. CPR Part 31: Following Edwards v Slater & Gordon UK Ltd [2022] EWHC 1091 (QB), the judge held that “there is no express rule set out in Part 8 dispensing with the disclosure provisions of CPR Part 31.”
    2. Inherent jurisdiction: The court recognised the inherent jurisdiction to order inspection in solicitor-client assessments, citing the approach in Hanley v JC&A.
    3. General case management powers: CPR 3.1(2)(p) provided sufficient authority to make the order as part of managing the case and furthering the overriding objective.

The Costs of Preparing for Inspection | A Pyrrhic Objection

The defendant estimated the costs of preparing files for inspection at between £15,000 and £25,000. The judge was notably unimpressed by these figures, observing that:

    • These costs would “by and large be incurred in preparing the file for detailed assessment” anyway
    • Documents should already be organised in a firm of the defendant’s stature
    • Confidential materials subject to existing confidentiality orders ought to be kept in separate files
    • The estimate was either “hugely pessimistic or otherwise adopts an entirely unrealistic stance”

The Discretionary Decision | Obstructive Conduct Has Costs Consequences

The judge’s criticism of the defendant’s stance was particularly pointed: “I consider the Defendant’s stance and conduct to be somewhat obstructive whilst claiming in correspondence a desire to compromise.”

The combination of refusing inspection whilst providing only minimal replies made “a very lengthy detailed assessment hearing inevitable” – contrary to the overriding objective. The judge noted that inspection might either demonstrate to the claimant that their prospects were low or “cause the Defendant to reflect on the extent to which their work can be demonstrated at all.”

The Costs Order | The Price of Obstruction

Most significantly for costs practitioners, the judge ordered that the costs of the claimant’s application be paid by the defendant, to be summarily assessed if not agreed. This adverse costs order reflected the court’s view that the defendant’s opposition to inspection was unreasonable in the circumstances.

The judge also directed that:

    • The claimant should bear the cost of isolating documents already in their possession
    • Otherwise, the costs of inspection would be costs in the assessment

Practical Implications for Solicitor-Client Assessments

This decision reinforces several important principles for costs practitioners:

    1. Procedural flexibility exists: The court has multiple routes to order inspection in solicitor-client assessments, even after points of dispute have been served. Rigid adherence to one procedural interpretation will not prevent appropriate case management.
    2. Minimal engagement carries risks: Providing only cursory replies to detailed points of dispute, particularly on substantial bills, may be viewed as obstructive conduct warranting adverse costs consequences.
    3. Inspection costs arguments need substance: Generic objections about the burden of preparing files for inspection are unlikely to succeed, particularly where those costs would be incurred for detailed assessment preparation anyway.
    4. The overriding objective applies: Conduct that makes lengthy detailed assessment hearings inevitable runs counter to the overriding objective and may attract costs sanctions.
    5. Technical objections rarely succeed alone: Arguments based solely on alleged drafting defects or narrow procedural interpretations are unlikely to succeed where the substantive application has merit.

Costs Not Capped At Estimates Where Client Consented To Further Work

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Background

The case concerned a solicitor-client assessment brought by Mr Paul Evans against his former solicitors, Acuity Law Limited. The dispute arose from legal services provided between August 2022 and January 2023 across three distinct matters. Matter 1, which had been resolved between the parties, was not in issue. Matter 2 involved a family dispute concerning ownership of a vintage motorbike and a Rolex watch, whilst Matter 3 related to costs proceedings in which the Defendant had represented the Claimant.

The Defendant had rendered six invoices totalling approximately £11,200 plus VAT. The Claimant challenged these costs on multiple grounds, prompting the Defendant to request a detailed assessment hearing. The matter came before Costs Judge Nagalingam on 5 March 2025 as a preliminary issues hearing, with the court required to determine several fundamental questions before any line-by-line assessment could proceed.

A significant procedural issue had arisen concerning the manner of electronic disclosure. The Defendant had provided voluminous electronic files containing extensive duplication, with entire email chains repeated multiple times. Additionally, the original disclosure had suffered corruption, with all emails showing the disclosure date rather than their original dates. This had prevented the Claimant from preparing detailed points of dispute addressing individual items of work.

Costs Issues Before the Court

The court was required to determine four principal costs issues. First, whether the Defendant’s costs should be limited to the estimates provided at the outset of each matter. For Matter 2, an initial estimate of £900 plus VAT had been given, later revised to £3,600 plus VAT. For Matter 3, an estimate of £3,000 plus VAT had been provided for the “Initial Stage” of work.

Second, whether costs incurred in Matter 3 should be reduced to nil under CPR 46.9(3)(c) as “unusual” costs. The Claimant argued that pursuing an oral review of a provisional assessment with leading counsel, when success was virtually impossible, rendered all associated costs unusual and therefore irrecoverable.

Third, whether the Defendant’s termination of the retainer two days before the oral review hearing was unreasonable, such that no costs could be recovered under the principle of “entire contracts” established in cases such as Gill v Heer Manak Solicitors [2018] EWHC 2881 (QB).

Fourth, the court needed to address the procedural consequences of the defective disclosure and determine whether supplemental points of dispute would be required before any detailed assessment could proceed.

The Parties’ Positions

The Claimant, represented by Mr Mark Carlisle, argued that the Defendant had fundamentally failed in its duties by exceeding estimates without proper warning or obtaining informed consent. On Matter 2, Mr Carlisle submitted that the work never progressed beyond the “Initial Stage” as no injunction application was ever drafted, yet costs of £5,600 plus VAT had been charged against an estimate of £900-£3,600. He relied on the clear scope definition in the retainer and argued that work on the Rolex watch dispute fell outside this scope.

Regarding Matter 3, the Claimant’s primary position was that all costs should be disallowed due to unreasonable termination. The secondary position was that all costs were “unusual” under CPR 46.9(3)(c) because the Defendant had allowed the Claimant to pursue a hopeless oral review without proper advice about the irrecoverability of costs. Mr Carlisle emphasised that once the consumer regulations point had been conceded, achieving the necessary 20% reduction was impossible, particularly given the Part 36 offer of £47,000 against a provisionally assessed figure of £61,000.

The Defendant, represented by Mr Dean O’Connor, contended that Mr Evans was a sophisticated client who drove the litigation strategy and frequently rejected advice. On Matter 2, Mr O’Connor argued that the Claimant had expanded the scope by introducing the Rolex watch dispute and involving additional family members. He pointed to contemporaneous emails showing the Claimant’s active involvement and approval of the work undertaken.

On Matter 3, the Defendant maintained it had repeatedly warned the Claimant about costs risks and the difficulty of achieving sufficient reductions. Mr O’Connor cited extensive correspondence demonstrating warnings about the 20% threshold, the Part 36 offer implications, and recommendations to use junior rather than leading counsel. He argued that termination was justified by non-payment of fees and that the Claimant had already secured alternative representation through Kain Knight before the hearing.

The Court’s Decision

Costs Judge Nagalingam rejected the Claimant’s arguments on estimates, finding that neither Matter 2 nor Matter 3 costs should be capped at the estimated amounts. The court noted that both retainers clearly stated that “further work will be charged at our usual hourly rates” and found no evidence that the Claimant had treated the estimates as caps. For Matter 2, the court found that stage two work had been “substantially engaged” and that the Rolex watch dispute reasonably fell under “further work” with the Claimant’s clear knowledge and consent.

On the unusual costs argument under CPR 46.9(3)(c), the court found that the Claimant had not established that Matter 3 costs were sufficiently unusual to be deemed unreasonably incurred. The judge emphasised that the Claimant was “heavily involved, kept well informed and consistently provided both explicit and implied consent for the steps taken on his behalf.” Crucially, the court found that the Defendant had discouraged the use of leading counsel but the Claimant had insisted upon it.

Regarding termination, the court rejected the argument that the Claimant had been “thrown to the lions.” The judge found that the Claimant had already been in contact with Kain Knight and was in the process of instructing them at the time of termination. Non-payment of fees was recognised as a common and legitimate ground for termination.

However, the court accepted the Claimant’s criticisms regarding disclosure. The judge found that the corrupted and duplicative disclosure had prevented proper preparation of points of dispute and directed the Defendant to resubmit electronic disclosure in de-duplicated format with original dates preserved. The court ordered that supplementary points of dispute and replies be filed thereafter, with provision for a further hearing if required.

The judgment left open the possibility for the Claimant to challenge whether costs were reasonable in amount, whilst finding that the costs had been reasonably incurred with the client’s approval. The court declined to rule on the specific issue of whether Mr Marven KC’s £1,100 conference fee should have been included in the bill, leaving this for the parties to address in any subsequent proceedings.